1. Unit 1: Basic Economic Concepts

2. The Circular Flow Model
The Product Market-
The “place” where goods and services produced by businesses are sold to households.
The Resource (Factor) Market-
The “place” where resources (land, labor, capital, and ent.) are sold to businesses.

3. DEMAND SUPPLY Individuals Businesses SUPPLY DEMAND Resource Market
$$$ Costs $$$
$$$ Income $$$
Resources
Resources
(Factors of
Production)
Individuals
Businesses
Goods and
Services
Goods and
Services
$$$ Spending $$$
$$$ Revenue $$$
SUPPLY
DEMAND
Product Market 3

4. Free Response Questions
When you do a FRQ don’t forget to R.O.L.L.:
READ the entire question first
ORAGANIZE your answer
LIST your answers like the question
LABEL everything

7. Take out your Problem Set
5 Problem Set Hints:
NEVER use your computer to create graphs
Answer in the same FORMAT as the questions. (A, B, C i, C ii. etc.)
Fully EXPLAIN or give examples when asked to do so. It is better to over explain.
Answer the ENTIRE question explicitly.
NEVER straight copy your book or my notes. Use your own words and examples.
Take out your Problem Set